Enforcement of Noncompetition Agreements Getting Easier?

In a decision that could make enforcing a central component of most noncompetition agreements easier, a U.S. District Court judge ruled this week that former employees cannot escape restrictions against soliciting their former customers by claiming that their customers made the first contact. “Neither the plain meaning of the word solicit, nor the plain meaning of the word entice requires some kind of first contact,” Judge Douglas Woodlock wrote. “Contrary to Defendants’ contention, Massachusetts courts do not draw a bright-line distinction between those actions following first contact by the client and those following first contact by the employee.”

Though not binding on Massachusetts judges, the decision may persuade them to look more closely than some have in the past. It is common for employees defending against noncompetition and/or non-solicitation agreements to argue that they did not seek out former customers but were instead contacted by them to do business. Former employers can now more effectively counter that argument, and Judge Woodlock’s decision seems well-balanced and reasonable. In the case at bar, Corporate Techs., Inc. v. Harnett and OnX USA, LLC, there was no dispute that the former employee competed for relevant customers. The court simply ruled that there is more to the analysis of noncompetition agreement enforcement answering the simple question, “who called whom first?” In doing so, he distinguished between ‘receiving business’ and taking active steps to persuade a customer to deliver it.